How Pandora Is Adjusting The Dial On Voice-Activation

"Listening on Pandora is up 250 percent on voice-activated devices, with connected home listening up 22 percent year-over-year," says Pandora SVP Susan Panico.

By David KaplanOct 20, 2017 1:31PM

Pandora has already called voice-activation the “new touch” as a way of highlight the role of virtual assistants within connected devices like the Amazon Echo in accessing digital content and commerce.

Developing A New Sonic Strategy

As Susan Panico, SVP, Strategic Solutions at Pandora, told GeoMarketing during last month’s Advertising Week NY, the message the company is delivering to advertisers is that it’s imperative to rethink their “sonic strategy” when it comes to streaming audio and voice-activation.

“Voice-activation is actually one of the most exciting growth opportunities that we have as an organization,” Panico said. “We’re in 2,000 connected devices, and just at the end of Q2, the voice activated devices we saw a 282 percent year over year growth. Listening on Pandora is up 250 percent on voice-activated devices, with connected home listening up 22 percent year-over-year.”

One other point that Panico and Steven Kritzman, Pandora’s SVP of Advertising Sales, also sought to make clear to brands and agencies is that voice-activated devices also opens up marketing to a demographic segment that’s often considered a distant second in importance to marketers.

“People to assume that connected devices are being used by young techies, and our research shows us that 25 percent of those are over 55,” Panico said. “You have more people listening in the home as opposed to on-the-go, and that creates a huge opportunity for marketers. We saw that with 70 percent of those listeners, their use of music, audio, podcasting — pretty much anything to do with audio — has greatly increased. So the marketer implication really is, most marketers think about what their audio identity is.”

Just as advertisers have had to rethink video as more than repurposing a 30-second TV ad for YouTube, audio ads have to go beyond just a jingle when it comes to crafting marketing that resonates to streaming listeners, Panico said.

“One of the things that being in the home is, it’s the most personal locations a brand could ever enter,” Panico says. “How do you think about the voice that you use? What are the sound effects that you use? Then, there’s such a great opportunity for contextual targeting when you think about people are cooking, cleaning, hanging out with family. And because people are actively engaging and choosing what to listen to more specifically than radio, advertisers have to adjust their audio strategies to fit that different audio landscape.”

Audio’s Next Phase

Among the findings in the Pandora report:

AM/FM is far from dead, Pandora notes, but…

Between 2010 and 2018, average daily time spent listening to radio will have fallen by 28 percent.

With a median age of 52, radio has the oldest audience among the audio platforms.

Radio’s long-held dominance in the car is crumbling as more connected vehicles hit the road. Other foreboding motor trends that are likely to impact AM/FM usage include a shrinking percentage of licensed drivers, fewer privately owned cars, and fewer cars that even need drivers.

Many top-rated major-market radio stations still cram as many as 10 ads into a break with no evidence that this strategy is beneficial to the listener or the advertiser.

STREAMING: Over half of American listen to streaming audio weekly, signifying that the medium has “made the mainstream.” Many societal and technological trends are guiding this growth, including:

A surging dependence on the smartphone is affecting people of all ages. While it may come as no surprise that young people spend nearly 20 hours a week on their phones, it’s the 50-to-64-year-old age group that spends the most time on their mobile devices. In a telling statistic, 50-64s now spend more time on their phones than they do with AM/FM radio.

Voice control of smart speakers and other devices reflect not only a technological achievement, but it may revolutionize the way we interact with all internet devices going forward.

Streaming services including Pandora are developing innovative ad products that are as personalized as the music content that attracts a majority of American listeners each week.

“Right now, we’re at the point where we have enough scale and advertisers are excited about all the connected home devices,” says Kritzman. “The next phase is as the voice activated devices continue to scale up right, then you’re going to see advertisers that want to come in with solutions just to run voice activation. The idea that will propel advertising in the next year is something like, ‘You’re one command away from booking this reservation, finding that store, and from completing a purchase. So advertising has to catch up to those changes.”